THE ROAD TO MILLIONS: A SHILLING AT A TIME

By George Marenya

Almost everything – including the universe – started small. To microfinance and its high priests, small is not a dirty word.

Small has its blessings. It is easy to focus on a small business, for example. And why not? If you lose the small things in your possession, too bad. You are therefore likely to work with all your might to avoid losing the small things.

The end game of microfinance is to make a successful business man out of the small man. To enable him play in the big league. In other words, it prepares the micro-entrepreneur to be tomorrow’s corporate titan.

For a start though, microfinancing is the act and principle of offering financial products and services to the low income bracket.

These small funds help the budding entrepreneur to generate income, build asset, deal with business and ownership risks and even meet their personal day to day needs.

The roots

Scholars trace the roots of the modern day microfinance to Bangladesh. In the beginning, the 27 dollar loan was what Professor Muhammad Yunus gave the initial beneficiaries of Grameen Bank.

Grameen had been born out of a famine that struck Bangladesh sometime in the 1970’s.

Professor Yunus, a scholar who had studied and taught in the United States was worried, and rightly so, that all the high sounding economic theories and models could not stop hunger from ravaging his own people.

He was struck by the sheer contrast between the situation of the bamboo weavers and the stools they produced. While the weaver would be clad in rags, the stools were masterpieces.

He sought to know why. In the process, he realised that the baskets did not belong to the women who weaved them. They were  mere labourers. The first solution then was to enable them own the stools. This is when the 27 US dollar loan came.

This loan removed the women from the cycle of debt. Those who earlier lent the women money allowed them to sell the stools at a price just higher than what the raw materials cost.

The 27 US dollar was the entire borrowing needs of 42 women combined. And we still insist that greed is not at the core of failure of capitalism?

Capitalism at its most primitive levels keeps out the majority from the feeding tray. On the contrary, microfinance provides the poor a back door to the high table, one dollar at a time.

The only catch is to make financial knowledge an integral part of microfinance. Things like personal discipline, grit and basic book-keeping can go a long way in enabling the beginner to steady his baby steps and get his grounding.

Success stories

There are many stories in Kenya of people who started out hawking and ended up as millionaires and even billionaires.

Take Paul Kinuthia for example. Who in his or her wild imagination would have thought that a man who started out selling Tropical brand sweets and then cosmetics would one day be a billionaire?

All successful entrepreneurs appreciate one thing – that they are the greatest assets that their companies have. If in doubt, ask the famous William Osewe Guda, he of Ronalo Foods. He started out hawking miskaki in a small carton in Kaloleni estate. Two short decades later, he is a multimillionaire with a four star hotel in the works in Kisumu city.

In a country starved of resources like ours, our people are the best and most abundant resource we can boast of. But for the people to deliver, you must inspire them.

Once you have inspired them, they become your partners and not just your workers. With partners or co-owners, the journey becomes easier. Partners inspire one another. Inspiration feeds on its own. You live for one another and refuse to give up.

Equity Bank staff for instance used to sleep on the banking floor in the early years. Entering ledger by hand is not for the faint hearted. Not during peak days of the month when deadlines are king.